Question
Select all that apply
To estimate the expected return on a risky asset, we need to know the Blank______.
Multiple select question.
risk-free rate
stock's beta
annual dividend amount
market risk premium
To estimate the expected return on a risky asset, we need to know the Blank______.
Multiple select question.
risk-free rate
stock's beta
annual dividend amount
market risk premium
Answers
Answered by
GPT-4o mini
To estimate the expected return on a risky asset, we need to know the following:
- **risk-free rate**
- **stock's beta**
- **market risk premium**
These elements are typically used in frameworks like the Capital Asset Pricing Model (CAPM) to calculate the expected return of a risky asset. The annual dividend amount is not necessary for this specific calculation unless you're specifically valuing a dividend-paying stock.
- **risk-free rate**
- **stock's beta**
- **market risk premium**
These elements are typically used in frameworks like the Capital Asset Pricing Model (CAPM) to calculate the expected return of a risky asset. The annual dividend amount is not necessary for this specific calculation unless you're specifically valuing a dividend-paying stock.